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Any Tom, Dick and Harry can prepare and lodge the BAS……but should they?

It’s a well known fact that almost everyone can prepare and lodge the Business Activity Statement (BAS). Those who charge a fee for this task must become registered with the Tax Practitioners Board (TPB) as stipulated by the TASA 2009 legislation. Others, however, who fit certain criteria (see below) don’t have to register but can still prepare and lodge BAS. So we have registered and unregistered persons doing the same job. The question is, should unregistered persons be preparing and lodging BAS in the first place? I don’t think so, and here’s why:

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The TPB have decreed that (amongst other criteria) if you are a business owner and you do the books for your own business, you can prepare and lodge your own activity statements. Also, if you employ staff, you may allocate the task to a staff member. Moreover, in either case, you do not have to register with the TPB in order to prepare your own BAS. But here’s the thing, if you or your staff members have little experience or knowledge in the area of GST law should you really be processing your BAS in the first place? The old saying, “just because you can, doesn’t mean you should” springs to mind. GST law is a complicated animal. It encompasses several areas including GST, Wine Equalisation Tax, Luxury Car Tax, Fuel Tax, Fringe Benefits Tax, PAYG (Pay As You Go) Withholding and PAYG Instalments. It is unlikely that the average business owner will be across all of these areas of GST law and as such, in my opinion, should not be preparing his own BAS. GST law is not for the fainthearted. I believe if you aren’t qualified and/or experienced, you should not be tackling the BAS. Business owners looking to ensure that their BAS is done correctly should instead, engage the services of a registered BAS/Tax agent.

Why can BAS/Tax agents prepare the BAS better than business owners?

Simple! BAS/Tax agents are trained, qualified and experienced in the area of GST law. Business owners in general, are not! More specifically, agents are

BAS preparation then, is best left to the professionals. It is not the domain of the average business owner with little or no tax knowledge. Again, “just because you can, doesn’t mean your should”.

The ATO bang on and on about how many errors they see on the BAS’s that are lodged with them, so much so that they have dedicated several pages of their website to this issue, offering many ways to avoid errors and assisting business owners to complete BAS properly.

But why do they need to do this?

I would say it’s because of the number of BAS’s completed by individuals who have absolutely little or no knowledge about GST law, tax law and/or correct bookkeeping – the very same individuals to whom the TPB has given the green light to prepare and lodge BAS legally.

The question is should the TPB allow these persons to prepare and lodge the BAS in the first place?

If the TPB and ATO looked at this issue more closely, they would see that if more business owners engaged BAS/Tax agents to prepare their BAS’s instead of trying to do their own, the number of reported BAS without error would increase significantly. Surely this would be a positive in their eyes both on a practical and financial level.

What do you think? Is the TPB right in allowing non-registered persons to prepare and lodge BAS or should BAS’s become the sole domain of registered BAS/tax agents? Personally, I believe that BAS law is far too complicated to be left to the uninitiated. Sure, most people can prepare a BAS but if these people are not educated in the field of GST law (like BAS/tax agents are) then the probability that errors will be made increases significantly. I believe BAS preparation should only be done by registered Tax/BAS agents because they are the most qualified to do so.

  • Laurie O’Mara

    Can a Strata Manager prepare and Lodge Business Activity Statement on behalf of a Body Corporate

  • Hi Laurie, I’m looking into the answer for you and will respond in the next day or so. Can I ask if payment is being received for doing the BAS?

  • Alois

    Rubbish, many small businesses have little or nothing to do with Wine Equalisation Tax, Luxury Car Tax, Fuel Tax and Fringe Benefits Tax. A good accounting system where everything is entered correctly and some common sense is all that’s needed. I do have a very good understanding of accounting and the article above is trying to scare business owners into spending good money to go to an accountant who just hands it over to some uni student or the secretary who in turn just pulls the information from the accounting system to complete the BAS. I used to do my own BAS for over 10 years and never had any issues. Yes I was audited once because of a large amount that went through and surprise surprise I passed the ‘complicated, uninitiated, non-professional’ BAS test!

    • Thanks for your opinions Alois. I don’t agree of course however, I’m very happy to see (and publish) other’s ideas on the matter. Like everything, some feel very capable of doing the BAS but others less so. It’s horses for courses really but I still say that there is a lot to know – just ask anyone who has tried to get registered as a BAS Agent – it ain’t easy! Thanks for commenting again – appreciate your thoughts and totally understand where you’re coming from.